New car estimated future value in four years??

BoxerfanUK

Hi all,

We are considering a new Kia Sportage 1.6T GDi 212 HEV GT-Line S 5dr Auto (2 wheel drive), and trying to decide whether to buy outright or take out a personal lease over 4 years.

I know what a personal lease will cost us over four years, so am trying to get a rough idea of what the future value of this car may be in four years time, based on 5K miles per year if we were to buy it outright (via an online new car discount firm)

I believe that both CAP and Glass's both have future value calculators, but i'm not in the motor trade so can't access that sort of info.  Obviously I'm only after a rough estimated value so if anyone knows of any other ways to find out this type of info it would be much appreciated.

Many thanks.

XRS200

Try a PCP quote over 4 years and see what the balloon payment would be.  Probably as good an estimate as you'll get

Mildly_Miffed

It's all guesswork.

There's three ways to scientifically guess...
1. Look at the value of 4yo similar cars.
2. Look at the balloon on PCP quotes.
3. Use a time machine.

One thing's for sure - the cost per mile for four years of 5k/year in a new car will be HORRENDOUS. On a £35k list price car, it wouldn't surprise me if it was something like 75p/mile for the depreciation alone, before all the other costs. 

ididgetwhereiamtoday

I’d look at buying a 3 year old sportage at half the price, keep it for four years until the warranty runs out. You’ll be quids in. 

njkmr

I would guess at less then 50% of what you bought it at.
So £35k car probably worth about £15k four years later depending on condition and how you sell it. Private sale or sell to dealer for instance which would return the lowest figure.

cymruchris

Who knows what will happen in the world in the next 4 years - don't pin your hopes too much on a 'predicted future value'. By the time the 4 years actually comes around, it might be worth more, or it might be worth less. How long is a piece of string? What if tomorrow's government introduces a new 'You own a Kia' tax - the future value might plummet. They might also introduce a 'You own a Kia so we'll give you £400 a year towards your electricity costs' (very unlikely!) but that might send the future residuals up. 

Arunmor

I used to run a spreadsheets when looking at cars lease, PCP, Cash, nearly new etc and future value was always the biggest thumb suck.  The folk above have given some ideas of how to get close.  My personal view are second hand cars are still expensive and in my view might be a wee bit cheaper going forward (but no doubt I will be proven wrong).

You can use the future value figure to swing it to your preferred choice if the numbers are very similar.  

facade

I can never get my head around leasing

The lease company must buy the car at an absolutely massive discount for leasing to be cheaper than you buying it outright.

At the end of the lease whoever owns the car wants to flog it off for it's residual value anyway, and to have made a small fortune out of your lease payments, so the lease return has to be more than (Purchase price - residual).

I can see that if by some miracle the effective interest on the lease is less than the interest you can get on the purchase price then you'd win if you kept the money in the bank/invested it and paid the lease, but someone, somewhere is either paying interest on a loan to fund the initial purchase of that vehicle, or losing interest/investment return on money they used to buy it to be able to lease it.

Is there some creative tax loophole that makes up the difference somehow?

DullGreyGuy

facade said:

I can never get my head around leasing

The lease company must buy the car at an absolutely massive discount for leasing to be cheaper than you buying it outright.

At the end of the lease whoever owns the car wants to flog it off for it's residual value anyway, and to have made a small fortune out of your lease payments, so the lease return has to be more than (Purchase price - residual).

I can see that if by some miracle the effective interest on the lease is less than the interest you can get on the purchase price then you'd win if you kept the money in the bank/invested it and paid the lease, but someone, somewhere is either paying interest on a loan to fund the initial purchase of that vehicle, or losing interest/investment return on money they used to buy it to be able to lease it.

Is there some creative tax loophole that makes up the difference somehow?

They do get large discounts because they buy thousands of vehicles every year.

The other difference is the treatment of VAT... HP is the supply of goods with a separate credit agreement and so VAT is payable in full up front. Lease is a service not goods and so the VAT is payable on the monthly payments not up front. This is why a lease company won't typically allow you to buy the car at the end to avoid the risk that its deemed that it was actually the supply of goods. 

Arunmor

The trick with leasing is finding the deal not the car. 

Going back 15 years ago there were lots of unsold cars around that the manufacturer didn't want to sell off cheap in the market, leasing hides that.  You want to look for unpopular cars or ones that have been superceded  by a new model.  I had a quick calculation based on monthly payments vs what I could buy it for new, a few seconds told me whether it was a good, poor, average or stunning deal. 

Unfortunately in the main those days of stunning deals seem to be long gone.

If you decide you want eg A brand new, M series BMW you will never get a great deal.

I changed my modus operandi to buying and having 2-4 yo salvage repaired with no intention of selling until the low loader came to take it away.

Nebulous2

facade said:

I can never get my head around leasing

The lease company must buy the car at an absolutely massive discount for leasing to be cheaper than you buying it outright.

At the end of the lease whoever owns the car wants to flog it off for it's residual value anyway, and to have made a small fortune out of your lease payments, so the lease return has to be more than (Purchase price - residual).

I can see that if by some miracle the effective interest on the lease is less than the interest you can get on the purchase price then you'd win if you kept the money in the bank/invested it and paid the lease, but someone, somewhere is either paying interest on a loan to fund the initial purchase of that vehicle, or losing interest/investment return on money they used to buy it to be able to lease it.

Is there some creative tax loophole that makes up the difference somehow?

Over the piece lease companies are going to make money. At times when the stars align it is possible to get a spectacular deal however. 

I once saw a seat mii on a two year deal at £67 a month. At the time several of my colleagues were paying that for a mobile phone. It appealed to me that I could get a car for less than they were paying for a phone. 

I'm coming to the end of my first lease for a long time. An electric car on a 3 year deal at £210 a month. Total lease cost of £9k. At the time there was a 6-9 month wait for them new, and the lease company had 2 for immediate delivery. The car has lost twice that in depreciation in 3 years. Even if I'd been able to find one, there is no way I'd have been able to structure another deal that came close to what it has cost me.